It certainly would add nice touches to a scenery, if we could plant trees and shrubs or at least having the standard tree billboards to place arbitrarily. Are there any free trees (not high poly) available?
There are plenty of 3D tree generators out there, some even offer quality setting that would let you have different LODs.
This one looks nice
http://arbaro.sourceforge.net/The trick would be getting the game to handle the current billboard trees as the lowest LOD and getting the 3D model to look somewhat similar to the corresponding billboard. I'm far from having enough expertise to do any of this or to give you further details though.
The end result would have some limitations as the trees wouldn't be procedurally generated (they would all look the same), I'm also not sure what would happen with the rotation thing and the automatic re-sizing the engine currently does with the flat trees.
A good while ago someone placed some random 3D models into the game, they looked nice, but I believe it wasn't a replacement of anything, just hand-placed models. The official procedurally generated 3D trees made by the outerra team were shown as "in-development content" some time ago, the video must still be somewhere on the forum; it looked pretty fu**ing neat.